||The Equity and Efficiency of Health Resource Allocation in Taiwan’s National Health Insurance System
||Department of Industrial and Information Management
multi-criteria decision making
grey incidence analysis
data envelopment analysis
From a health policy perspective, ideal resource allocation in health care should be concerned with the combination of inputs required to produce these services at the lowest costs, given that resources are limited. To accomplish this goal, procedural equity must accurately assess the fairness of health care services delivery.
Taiwan implemented a National Health Insurance (NHI) program in 1995 so as to reduce financial barriers for all citizens using a universal health care system. Horizontal equity, an explicit goal of the NHI system, is to guarantee equal opportunity of access to health care. However, due to a severe financial deficit, a global budget was introduced to replace the original payment system in 2002.
At the macro level, measuring equity and efficiency of resource allocation in hospital-based health care services is a complex issue concerning multi-criteria decision making (MCDM). Two methods of MCDM are illustrated and analyzed in this study:grey Incidence Analysis (GIA) is used to measure the static resource allocation in NHI system to address the equity in health care services between urban and rural in Taiwan; and data envelopment analysis (DEA) is applied to measure the efficiency of health care resource allocation and further to explore the impacts of global budgeting scheme in Taiwan’s NHI system.
From the findings of this empirical study, health care resources tend to be clustered in the metropolitan areas, like New Taipei City, Taipei City, Taichung City, Tainan City and Kaohsiung City. Not only equity but also efficiency in Taipei City has the highest ranking, which implies that health care resources in Taipei City are well utilized without wasting health care resources. Although Penghu County has a lower ranking in regards to equity, it has better resource allocation in overall efficiency and allocative efficiency.
Due to supply exceeding demand, Hsinchu County and Hsinchu City have excess supply in hospital-based health care services. DMUs Yilan County, Changhua County, Nantou County and Chiayi City, where demand exceeds supply (excess demand) in hospital-based health care services, it is advisable that a better system of location-selection for new hospitals be implemented in the future. Hence, policy maker should draw attention to improving resource allocation of health care services for the equity in areas such as Yilan County, Hsinchu County, Changhua County, Nantou County, Hsinchu City and Chiayi City.
List of Tables vi
List of Figures vii
Chapter 1 Introduction 1
1.1 Research Background and Motivation 1
1.2 Research Objective 6
1.3 Research Procedure 7
Chapter 2 Literature Review 9
2.1 National Health Insurance system in Taiwan 9
2.2 Equity 13
2.3 Efficiency 17
2.4 Multi-Criteria Decision Making 20
2.5 Grey Incidence Analysis 22
2.6 Data Envelopment Analysis 24
Chapter 3 Methodology 29
3.1 Methodology 29
3.2 Data Source 36
Chapter 4 Result 38
4.1 Demographic Description of Taiwan 38
4.2 Static Analysis of Equity 40
4.3 Static Analysis of Efficiency 44
4.4 Dynamic Analysis of Efficiency 48
Chapter 5 Discussion and conclusion 53
5.1 The Horizontal Equity of Health Care Resource in Taiwan’s NHI System 53
5.2 The Efficiency of Health Care Resource in Taiwan’s NHI System 55
5.3 The Dynamic Changes of Efficiency after Global Budgeting System 58
5.4 The Implications for Health Policy 61
5.5 Suggestions and Future Prospects 64
Aday, L. A., Begley, C. E., Lairson, D. R., & Slater, C. H. (2004). Evaluating the healthcare system: effectiveness, efficiency, and equity. Chicago: Health Administration Press.
Adler, N. E., Boyce, W. T., Chesney, M. A., Folkman, S., & Syme, S. L. (1993). Socioeconomic Inequalities in Health - No Easy Solution. Journal of the American Medical Association, 269(24), 3140-3145.
Adler, N. E., & Newman, K. (2002). Socioeconomic disparities in health: Pathways and policies. Health Affairs, 21(2), 60-76.
Andersen, R. M., McCutcheon, A., Aday, L. A., Chiu, G. Y., & Bell, R. (1983). Exploring dimensions of access to medical care. Health Services Research, 18(1), 49-74.
Beland, F., Birch, S., & Stoddart, G. (2002). Unemployment and health: contextual-level influences on the production of health in populations. Social Science & Medicine, 55(11), 2033-2052.
Bleichrodt, H., & van Doorslaer, E. (2006). A welfare economics foundation for health inequality measurement. Journal of Health Economics, 25(5), 945-957.
Burau, V., & Blank, R. (2006). Comparing health policy: an assessment of typologies of health systems. Journal of Comparative Policy Analysis, 8(1), 63-76.
Cardon, J. H., & Hendel, I. (2001). Asymmetric information in health insurance: evidence from the National Medical Expenditure Survey. Rand Journal of Economics, 32(3), 408-427.
Carrhill, R. A. (1994). Efficiency and Equity Implications of the Health-Care Reforms. Social Science & Medicine, 39(9), 1189-1201.
Casey, M. M., Thiede Call, K., & Klingner, J. M. (2001). Are rural residents less likely to obtain recommended preventive healthcare services? American Journal of Preventive Medicine, 21(3), 182-188.
Charnes, A., Cooper, W. W., & Rhodes, E. (1979). Measuring the efficiency of decision-making units. European Journal of Operational Research, 2(6), 429-444.
Chen, P. C., Yang, M. C., Chiang, T. L., & Cheng, S. H. (2003). A Study of Cross-Region Admission and the Distribution of Regional Inpatient Care Resources. Taiwan Journal of Public Health, 22, 27-32.
Chen, Y., Kilgour, D. M., & Hipel, K. W. (2008). Screening in multiple criteria decision analysis. Decision Support Systems, 45(2), 280-292.
Cheng, T. M. (2003). Taiwan's new national health insurance program: Genesis and experience so far. Health Affairs, 22(3), 61-76.
Chern, J. Y., & Wan, T. T. H. (2000). The impact of the prospective payment system on the technical efficiency of hospitals. Journal of Medical Systems, 24(3), 159-172.
Chirikos, T. N., & Sear, A. M. (2000). Measuring hospital efficiency: A comparison of two approaches. Health Services Research, 34(6), 1389-1408.
Chu, T. B., Liu, T. C., Chen, C. S., Tsai, Y. W., & Chiu, W. T. (2005). Household out-of-pocket medical expenditures and national health insurance in Taiwan: income and regional inequality. Bmc Health Services Research, 5.
Deng, J. L. (1989). Introduction to grey system theory. The Journal of Grey System, 1, 1-24.
Edelman, M. A., & Menz, B. L. (1996). Selected comparisons and implications of a national rural and urban survey on health care access, demographics, and policy issues. Journal of Rural Health, 12(3), 197-205.
Etter, J. F., & Perneger, T. V. (1998). Health care expenditures after introduction of a gatekeeper and a global budget in a Swiss health insurance plan. Journal of Epidemiology and Community Health, 52(6), 370-376.
Feinstein, J. S. (1993). The Relationship between Socioeconomic-Status and Health - a Review of the Literature. Milbank Quarterly, 71(2), 279-322.
Field, M. (1973). The concept of the “health system” at the macrosociological level. Social Science & Medicine, 7, 763-785.
Folland, S., Goodman, A. C., & Stano, M. (2001). The economics of health and health care. Upper Saddle River, NJ: Prentice-Hall, Inc.
Gerdtham, U. G., & Johannesson, M. (2003). A note on the effect of unemployment on mortality. Journal of Health Economics, 22(3), 505-518.
Hadad, S., Hadad, Y., & Simon-Tuval, T. (2013). Determinants of healthcare system's efficiency in OECD countries. European Journal of Health Economics, 14(2), 253-265.
Hanibuchi, T., Nakaya, T., & Murata, C. (2012). Socio-economic status and self-rated health in East Asia: a comparison of China, Japan, South Korea and Taiwan. European Journal of Public Health, 22(1), 47-52.
Hollingsworth, B., Dawson, P. J., & Maniadakis, N. (1999). Efficiency measurement of health care: a review of non-parametric methods and applications. Health Care Management Science, 2(3), 161-172.
Hosseinpoor, A. R., Bergen, N., Mendis, S., Harper, S., Verdes, E., Kunst, A., et al. (2012). Socioeconomic inequality in the prevalence of noncommunicable diseases in low- and middle-income countries: results from the World Health Survey. BMC Public Health, 12, 474.
Hsu, C. I., & Wen, Y. H. (2000). Application of Grey theory and multiobjective programming towards airline network design. European Journal of Operational Research, 127(1), 44-68.
Hurley, J., Lomas, J., & Goldsmith, L. J. (1997). Physician responses to global physician expenditure budgets in Canada: A common property perspective. Milbank Quarterly, 75(3), 343-&.
Hussey, P., & Anderson, G. F. (2003). A comparison of single- and multi-payer health insurance systems and options for reform. Health Policy, 66(3), 215-228.
Kao, C., & Hwang, S. N. (2008). Efficiency decomposition in two-stage data envelopment analysis: An application to non-life insurance companies in Taiwan. European Journal of Operational Research, 185(1), 418-429.
Kung, P. T., Tsai, W. C., & Hu, H. Y. (2008). Disease patterns and socioeconomic status associated with utilization of computed tomography in Taiwan, 1997-2003. Journal of the Formosan Medical Association, 107(2), 145-155.
Kuo, Y., Yang, T., & Huang, G. W. (2008). The use of grey relational analysis in solving multiple attribute decision-making problems. Computers & Industrial Engineering, 55(1), 80-93.
Liberatore, M. J., & Nydick, R. L. (2008). The analytic hierarchy process in medical and health care decision making: A literature review. European Journal of Operational Research, 189(1), 194-207.
Liu, S. L., Yi. (2006). Grey information : theory and practical applications London: Springer.
Lu, J. F. R., Leung, G. M., Kwon, S., Tin, K. Y. K., van Doorslaer, E., & O'Donnell, O. (2007). Horizontal equity in health care utilization evidence from three high-income Asian economies. Social Science & Medicine, 64(1), 199-212.
Kuwahara, Y., Nagata, S., Taguchi, A., Naruse, T., Kawaguchi, H., & Murashima, S. (2013). Measuring the efficiencies of visiting nurse service agencies using data envelopment analysis. Health Care Management Science, 16(3), 228-235.
McIntyre, D., & Gilson, L. (2000). Redressing dis-advantage: Promoting vertical equity within South Africa. Health Care Analysis, 8(3), 235-258.
Meyer, S. B., Luong, T. C., Mamerow, L., & Ward, P. R. (2013). Inequities in access to healthcare: analysis of national survey data across six Asia-Pacific countries. Bmc Health Services Research, 13, 238.
Mooney, G., & Jan, S. (1997). Vertical equity: Weighting outcomes? Or establishing procedures? Health Policy, 39(1), 79-87.
Mougeot, M., & Naegelen, F. (2005). Hospital price regulation and expenditure cap policy. Journal of Health Economics, 24(1), 55-72.
Navarro, V. (1989). Why dome vountries have National-Health Insurance, Others have National-Health Services, and the United-States Has Neither. Social Science & Medicine, 28(9), 887-898.
O'Neill, L., Rauner, M., Heidenberger, K., & Kraus, M. (2008). A cross-national comparison and taxonomy of DEA-based hospital efficiency studies. Socio-Economic Planning Sciences, 42, 158-189.
Olson, D. L., & Wu, D. S. (2006). Simulation of fuzzy multiattribute models for grey relationships. European Journal of Operational Research, 175(1), 111-120.
Park, J. M. (2012). Equity of Access Under Korean Universal Health Insurance. Asia Pac J Public Health. Advance online publication. DOI: 10.1177/1010539512446961.
Politzer, R. M., Yoon, J., Shi, L., Hughes, R. G., Regan, J., & Gaston, M. H. (2001). Inequality in America: the contribution of health centers in reducing and eliminating disparities in access to care. Medical Care Research and Review, 58(2), 234-248.
Schreiber, S., & Zielinski, T. (1997). The meaning of ambulatory care sensitive admissions: urban and rural perspectives. Journal of Rural Health, 13(4), 276-284.
Silver, M. P., Babitz, M. E., & Magill, M. K. (1997). Ambulatory care sensitive hospitalization rates in the aged Medicare population in Utah, 1990 to 1994: a rural-urban comparison. Journal of Rural Health, 13(4), 285-294.
Starfield, B. (2000). Is US health really the best in the world? Journal of the American Medical Association, 284(4), 483-485.
Stewart, T. J. (1996). Relationships between data envelopment analysis and multicriteria decision analysis. Journal of the Operational Research Society, 47(5), 654-665.
Terris, M., Cornely, P. B., Daniels, H. C., & Kerr, L. E. (1977). The case for a national health service. American Journal of Public Health, 67(12), 1183-1185.
Triantaphyllou, E. (2000). Multi-criteria decision making methods: a comparative study. Boston: Kluwer Academic Publishers.
Wagstaff, A., Paci, P., & van Doorslaer, E. (1991). On the Measurement of Inequalities in Health. Social Science & Medicine, 33(5), 545-557.
Wagstaff, A., van Doorslaer, E., & Paci, P. (1991). On the Measurement of Horizontal Inequity in the Delivery of Health-Care. Journal of Health Economics, 10(2), 169-205.
Wang, S. I., & Yaung, C. L. (2013). Vertical equity of healthcare in Taiwan: health services were distributed according to need. International Journal for Equity in Health, 12, 12.
Waters, H. R. (2000). Measuring equity in access to health care. Social Science & Medicine, 51(4), 599-612.
Wildman, J. (2003). Modelling health, income and income inequality: the impact of income inequality on health and health inequality. Journal of Health Economics, 22(4), 521-538.
Wilkinson, R. G. (1997). Socioeconomic determinants of health - Health inequalities: Relative or absolute material standards? British Medical Journal, 314(7080), 591-595.
Wu, C. H., Chang, C. C., Chen, P. C., & Kuo, K. N. (2012). Efficiency and productivity change in Taiwan's hospitals: a non-radial quality-adjusted measurement. Central European Journal of Operations Research, 2(21), 431-453.
Wu, C. R., Lin, C. T., & Chen, H. C. (2007). Optimal selection of location for Taiwanese hospitals to ensure a competitive advantage by using the analytic hierarchy process and sensitivity analysis. Building and Environment, 42(3), 1431-1444.
Wu, H. H. (2002). A comparative study of using grey relational analysis in multiple attribute decision making problems. Quality Engineering, 15, 209-217.
Zuckerman, S., Hadley, J., & Iezzoni, L. (1994). Measuring hospital efficiency with frontier cost-functions. Journal of Health Economics, 13(3), 255-280.